Netherlands - Economic forecast summary (June 2017)

GDP growth is projected to remain at or just over 2% in 2017-18. Private consumption growth will stay solid through the projection period, as wage growth picks up and unemployment declines further. Business and residential investment will remain strong, both supported by rising confidence.

Accommodative euro area monetary policy will continue to sustain demand. This projection assumes a neutral fiscal stance. However, available fiscal space should be utilised to improve inclusiveness and the productive capacity of the economy, which would help reduce one of the largest current account surpluses in the euro area. Investment can be sustainably increased by easing strict regulations on housing, improving the flow of credit to SMEs and by increasing direct fiscal spending on R&D.

The Netherlands, being a major economic hub, benefits significantly from global and European trade. Stronger domestic demand and increased participation in global value chains will improve trade growth, boosting productivity and incomes. Continuing to improve skills, particularly of immigrants and the long-term unemployed, would improve inclusiveness. Shortening the waiting period for labour market re-integration services would benefit workers who have been displaced as a result of increased global and European integration.